With the business potentially at an important milestone, we thought we'd take a closer look at Stoneridge, Inc.'s (NYSE:SRI) future prospects. Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic systems, components, and modules for the automotive, commercial, off-highway, and agricultural vehicle markets in North America, South America, Europe, Mexico, China, and internationally. The US$106m market-cap company announced a latest loss of US$17m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Stoneridge will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Consensus from 2 of the American Auto Components analysts is that Stoneridge is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$9.4m in 2026. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 106% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Stoneridge given that this is a high-level summary, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Stoneridge

One thing we would like to bring into light with Stoneridge is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Stoneridge's case is 82%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Stoneridge which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Stoneridge, take a look at Stoneridge's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Stoneridge worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Stoneridge is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Stoneridge’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.